Sebi Annual Report: Know What Changed From Your Social Media Feed to Your Portfolio In FY26

The Securities and Exchange Board of India (Sebi) has released its Annual Report for the financial year 2025-26. The market regulator has detailed structural shifts and operational trends across the financial ecosystem.

Sebi’s findings are set to define the policy measures and norms which will be introduced in the coming months. Notably, these forthcoming policy decisions will affect retail investors, as future rules governing areas, such as finfluencer content regulation, futures and options (F&O)  trading, and a ramp-up in primary market activity are set to be based on the findings made by the regulator. Here is a look at some of the key findings from Sebi's Annual Report for FY 2025-26:

Finfluencer Influence At An Unprecedented High

In its report, Sebi showed that 62 per cent of retail investors are influenced by financial influencers on social media. The statistic comes amid Sebi’s crackdown on finfluencers who operate without regulatory registration or verified performance track records.

The rising influence of finfluencers shows how digital advice has surpassed traditional avenues for seeking financial advice. However the prevalence of unregulated financial advice also poses a significant risk, as bad-faith actors can use their influence to mislead retail investors to manipulate the stock market. The regulator also mentioned that to mitigate the challenge, it is deploying artificial intelligence (AI)-based surveillance through Project Sudarsan.

Global Policy’s Domestic Spillover

Sebi has also highlighted a key shift in the way India’s securities market factors in the impact of global trade policy. The report showed that there was a significant spillover of the US policy level uncertainty into the Indian stock market. The World Uncertainty Spillover Index (WUSI) showed that for the first time in three decades, the uncertainty spillover index for India remained elevated for five consecutive quarters and peaked at 28,630 in the second quarter of 2025. The rising of the index shows the vulnerability of the domestic market to global volatility.

FPI Ownership Touches 15 Year Low

In FY26, the stock market also saw a continued selling of Indian equities by foreign institutional investors (FIIs). However amid the sell-offs, domestic institutional investor (DII) holdings climbed to an all-time high of 17 per cent by March 2026. Conversely, Foreign Portfolio Investor (FPI) ownership dropped to a 15-year low of 15.80 per cent, driven by a record net equity outflow of Rs 1,52,692 crore. On the other hand, domestic institutions cushioned the sell-off by making a record net purchase of Rs 8.50 lakh crore.

F&O Frenzy Sees Signs of Cooling

Sebi’s report showed that targeted efforts to raise awareness around the risks involved in F&O trading has cooled off speculative investing in the derivatives segment. The  efforts have led to a 51.5 per cent drop in total options contract volumes in FY26 compared to the preceding fiscal. The drop in options also coincides with a visible return to long-term asset ownership in the cash market, where the delivery-to-traded value ratio improved to nearly 30 per cent. The data shows that retail participation is slowly moving away from short-term speculative trading toward long-term goal based investing.

Tier-3 India Driving Mutual Fund Momentum

In FY26, the unique mutual fund investor base grew by 13.20 per cent to reach 61 million individual investors. This growth was driven by the rising adoption of mutual fund investment in Tier-3 cities as they now account for 55 per cent of the total unique investor count.

The shift in mutual fund activity shows that the financialisation of household savings through mutual funds is accelerating outside of metropolitan areas. The data also showed strong retail discipline as the monthly contributions for systematic investment plans advanced by 25.80 per cent to reach a record average of Rs 16,413 crore.

Sebi’s Proposed Rules and Future Roadmap

Sebi has also outlined a comprehensive forward-looking agenda for the upcoming fiscal year and has mentioned several initiatives it plans to take. One of the key initiatives mentioned in the report is Project Jagrook which will function as a nationwide, multi-linguistic campaign aimed at  enhancing investor awareness. As part of the project, an AI-enabled WhatsApp campaign will also be launched to share verified investing practices and grievance redressal mechanisms with retail investors.

The regulator also plans to undertake a revamp of the Sebi Investor Website to enhance user experience with advanced search tools. Sebi also plans to ease and simplify the nomination norms for demat accounts and mutual fund folios. A fast-track processing mechanism is being established for alternative investment fund (AIF) filings to accelerate private capital mobilisation.  A depository receipts framework for real estate investment trusts (Reits) and infrastructure investment trusts (InvITs) will also be specified to allow foreign investors wider access to Indian yield assets.

Additionally, the Sebi Setu Portal is being launched as a single-window interface for market intermediaries to access regulatory information and track registration statuses.

A single-window clearance mechanism is being developed to simplify processing for entities registered across multiple market infrastructure institutions. A pilot project on the tokenisation of corporate bonds using distributed ledger technology will be conducted to evaluate faster settlement speeds and smart contract automation.